SUMMER TRAINING PROJECT REPORT

ON

DESIGNING LOAN PRODUCTS FOR CONTROL FARMING MODEL

SUBMITTED BY UNDER GUIDANCE TO

VIKRAM KUMAR Mr. H. ANANDMBA (AGRI-BUSINESS) (SENIOR BRANCH MANAGER) BANK OF BARODAID. No 7945/10 SHIVRAJPUR, DISTT. KANPUR NAGAR

DEPARTMENT OF AGRI- BUSINESS MANAGEMENT

C.S.A. University of Agriculture & Technology Kanpur -208002

INTRODUCTION

ACKNOWLEDGEMENT

From the bottom of my heart I proudly avail the opportunity of expresses my

warmest appreciation with deep sense of gratitude to honorable Mr.R.K.

Goyal (Asstt. General Manager) for his co-operation of the successful

completion of my summer training. I deem to be my proud privilege to

express my deep sense of gratitude and highest veneration to Mr. H. Anand

(Branch manager) Shivrajpur Distt. Kanpur Nagar and Mr. M. H. Khan

(agriculture officer) for his talented inspiring encouragement and valuable

suggestions to summer training.

I emphatically extend my loyal and venerable thanks to Dr. Rajendra Prasad (

professor) & head , department of Agribusiness Management, C.S.A.

University of agriculture & technology Kanpur and Dr. Munish Gangwar

(Associate Professor) who provide me a steamed organization for summer

training .

Date: ( vikram kumar)

DECLARATION

I am vikram kumar student of MBA (agri- business) 2010-11 of

Agriculture Business Management, Chandra shekhar azad university

of agriculture & technology, Kanpur declare that I have furnished

original date and information to the best of my knowledge in the

project titled to design loan products for control farming model.

Assess the bank profile and its schemes for rural agriculture and

lending .suggest the different farming model which suitable for land

size and thier income. I maintained secrecy of all the information /data

collected in the course of discussions /training and shall use it for

academic purpose only.

( Vikram Kumar )

MBA (Agri – Business) 2010 -11

Chandra Shekhar Aazad University

Of agriculture & technology, Kanpur ( U.P.)

CONTENTS

1. INTRODUCTION

2. BANK PROFILE

3. DESIGNING LOAN PRODUCTS FOR CONTROL FARMING MODEL

4. FARMER`S PERCEPTION ABOUT BANK OF BARODA

5. SWOT ANALYSIS

6. SUGGESTION

7. CONCLUSION

BANK PROFILE

s

RURAL AND AGRICULTURE LENDING SCHEMES

1. BARODA KISAN CREDIT CARD (REVISED) SCHEME

2. PURCHASE OF TRACTORS AND OTHER HEAVY AGRICULTURAL MACHINES

3. SCHEME FOR FINANCING SECOND HAND / USED TRACTORS

4. RURAL GODOWN – GRAMIN BHANDARAN YOJANA

5. BARODA KISAN GROUP LOAN SCHEME

6. SALIENT FEATURES OF DRI SCHEME

7. MICRO FINANCE (SELF HELP GROUP)

8. AGRI CLINICS AND AGRI BUSINESS CENTRES

9. BARODA GENERAL CREDIT CARD

10. FARMER’S CLUB

11. BARODA RURAL INTERNET KIOSK FINANCE SCHEME

12. SCHEME FOR PURCHASE OF AGRICULTURAL LAND

13. SCHEME FOR FINANCING COMMERCIAL PRODUCTION UNITS OF ORGANIC INPUTS

14. SCHEME ON ASSISTANCE FOR BOOSTING SEED PRODUCTION

15. DAIRY AND POULTRY VENTURE CAPITAL FUND SCHEME

16. BARODA TOP-UP LOAN SCHEME FOR BENEFICIARIES OF INDIRA AWAS YOJANA (IAY)

17. FINANCING OF LPG CONNECTION IN RURAL AREAS

18. SCHEME FOR FINANCING HANDLOOM WEAVERS GROUPS (HWGS)

19. BARODA SCHEME FOR FINANCING CONSTRUCTION OF SANITATION FACILITIES IN RURAL

AREAS

20. PRIME MINISTER’S EMPLOYMENT GENERATION PROGRAMME

21. CREDIT GUARANTEE FUND SCHEME FOR MICRO & SMALL ENTERPRISES

22. SCHEME FOR REDEMPTION OF DEBTS OF FARMERS FROM NON-INSTITUTIONAL LENDERS

23. SCHEME FOR FINANCING DISTRESSED URBAN POOR FOR REDEMPTION OF THEIR DEBT TO NON

INSTITUTIONAL LENDERS

24.

Categories of Priority Sector

The following categories of advances as mentioned below would be included in the PrioritySector Lending.

I. Agriculture (Direct/Indirect)

II. Small Enterprises (Direct/Indirect Finance)

III. Retail Trade

IV. Micro Credit

V. Educational Loans

VI. Housing Loans

PRESENT BANKING SCENARIO

Indian Banking – towards Global Best Practices

Indian Financial Sector has witnessed unprecedented growth in the last decade and we believe the next 10 years will be as exciting. The industry has seen numerous innovations and several Indian Banks have successfully leveraged technology at globally efficient levels. However, the market is going to see increasing competition from global financial players and non-banking attackers. The market will see increasing segmentation and rising focus on customer service.

Delivering superior customer experience

The low level of customer loyalty in India across banking products like credit cards and housing loans is becoming a big cause of concern for leading players. Further, intensifying levels of competition is resulting in significant customer churn and rising costs which continue to rapidly erode overall profitability. To effectively address these challenges, it becomes critical to first understand basic customer behavior, needs and preferences. How do players in the Indian banking sector compare globally on customer experience? What can the banking industry do better to give customers a superior experience.

Driving operational and IT effectiveness.

In to-day’s challenging economic environment with burgeoning cost pressures, players are increasingly recognizing the importance of achieving operational excellence and cost efficiency. Undoubtedly, in order to accomplish this effectively, it is critical to build strong capabilities in IT and operations processes. How effectively and efficiently are we utilizing our IT resources? What major IT management levers should banks focus on? How should banks prioritize their portfolio of IT initiatives?

Building a high performing organization

CEOs and their top management teams are increasingly finding that many of the big strategic and operational questions on their plate involve leadership, talent and the broader organization. In today’s unprecedented talent crunch, the financial services industry is grappling with developing the leadership and talent. What should players do to ensure that it has the organizational alignment against key

priorities? How do organizations build execution capability? How can organization create capacity that is critical to sustained success?

Managing capital and risk

Capital efficiency is a core imperative for the banking sector and will increasingly come into focus given numerous growth opportunities which will drive need for capital. Most banks are in need of capital for growth. Banks which are unable to raise capital due to either performance issues or regulatory issues, will not be able to participate in the growth opportunities. Further with volatile markets and high employee turnover, it gets critical to effectively contain credit risk, market risk and operational risks. In addition, cost of compliance oversight in today’s environment are very high. Banks need to tap the high growth opportunities while ensuring capital efficiency, ensuring compliance and managing risk. Basel II will help the high performing banks on this front to manage capital better, while the weaker banks will face increased pressure. Is Indian banking sector is ready for this? What steps do individual banks need to take on capital management, compliance and risk?

BANK’S CORE STRENGTH

A large public sector bank with modern and contemporary personality Uninterrupted Record of profit making. Strong domestic presence throughout the country Bank’s operation extended in 25 countries Providing financial services to over 35 million customers across globe Baroda SUN- is a well accepted and recognized brand of Indian

Banking Industry Bank the common values of Honesty, Simplicity, Dedication and commitment Bank’s rapid and significant Technology progression A Prudentially strong bank – First PSB to have received Rating for Corporate

Governance – GAGR –2 Steady Movement towards International Best Practices – Preparing financials under

USGAP Bank’s presence in all leading financial centres of the world like London, Brussels, New

York, Bhamas, Dubai, Hong Kong and Singapore. Bank’s international operations account for 22% of Bank’s global business and around

one third of its net profits.

BANK’S MAJOR WEAKNESSES

o Net Interest Margin (NIM) remains under stress.

o Cost-income Ratio though coming down is still high .

o Fee based income ratio to total income is very low.

o Market share in both deposits and advances not of desired level

o Large amount locked up in Prudential write off.

o Return on Average Assets (ROAA) and Return on Equity (ROE) remains lower.

Loan System

Depending on predefined parameters setup in the loan system by the bank management, all loan payments are tracked daily and potential NPAs are reported. This gives bank staff adequate advance information to take corrective action before the missed payments actually turn into a classified NPA

With authorized access, any staff working in any branch around the country should be able to retrieve the customer loan information on his terminal and help the customer do a financial transaction. These financial transactions are automatically sent to the bank’s General Ledger and they update the appropriate credits and debits in the subsidiary ledgers in the GL

Major products under Farm Sector

Baroda Kisan Credit Card Financing farmers for purchase of agricultural land Financing for setting up of agri clinics and agri business centers by agricultural graduates. Capital investment subsidy scheme for constructions/expansion/modernization of cold storages and

onion godowns Form water management scheme for increasing crop production in eastern states Financing farmers in agri export zones under contract farming Advances against pledge of gold ornaments/jewellery Providing production credit to tenant farmers and share croppers

Designing loan products for control farming model

Designing loan for different farming system

Sustainable Farming System for Different categories of Households

S. No.

Farming System

Households having land up to 2 ha1 Forestry + Plantation crops + Spice crops+ livestock2 Field crops + Fruit crops+ livestock 3 Forestry+ Plantation crops+ Spice crops4 Field crops + Forestry+ Plantation crops + Fruit crops5 Forestry+ Plantation crop+ Specie crops + Fruit crops

Households having land 2-4 ha6 Forestry + Plantation crops+ Fruit crops + Spice crops7 Forestry+ Plantation Crops + fruit crops 8 Forestry+ Plantation Crops +Livestock9 Field corps +Forestry+ Plantation Crops + Spice corps + Livestock10 Field crops + Plantation crops + Spice crops + Livestock

Households having land 4-6 ha11 Field crops + Forestry+ Plantation crops+ Fruit crops + Spice crops+ Livestock 12 Forestry + Plantation crops + Spice crops + Livestock13 Field crops + Forestry + Plantation crops Spice crops + Livestock+ fishery 14 Field crops + Forestry + Plantation crops +Spice crops + Livestock15 Field crops + Forestry + Plantation crops + Livestock

Households having land 6-8 ha16 Field crops+ forestry + Plantations crops + Spice crops +Livestock17 Field crops +forestry + Plantations crops +Fruit crops + Spice crops + Livestock18 Field crops +forestry + Plantations crops + Fruit crops + Livestock19 Field crops +forestry + Plantations crops + Spice crops + Livestock + fishery20 Field crops +forestry + Plantations crops +fishery

Households having land 8-10 ha21 Field crops +forestry + Plantations crops + Spice crops + livestock22 Field crops +forestry + Plantations crops + Spice crops23 Field crops +forestry + Plantations crops +Livestock24 Field crop + Forestry + Plantations crops + Spice crops + Livestock + fishery25 forestry + Plantations crops +Spice crops

Households having land 10-12 ha26 Forestry + plantation crops + Spice crops27 Field crops + Forestry + Plantation crops + Fruit crops + Spice crops + Livestock28 Field crops + Forestry + Plantation crops + Spice crops + Livestock29 Field crops + Forestry + Fruit crops + Livestock30 Field crops + Forestry + Plantation crops + Spice crops + Livestock + fishery

Households having land more than 12 ha31 Field crops + Forestry + Fruit crops + Spice crops + Livestock 32 Field crops + Forestry + Fruit crops +Livestock33 Field crops + Forestry + Fruit crops +Fruit crops + Spice crops + Livestock 34 Field crops + Forestry + Fruit crops + Fruit crops + Spice crops 35 Field crops + Forestry + Fruit crops + Spice crops

Format of cost of cultivation per hectare

(A) Variable cost:

(1) Preparation of land

Ploughing – 1000Rs./hect. Cultivator

1250Rs/hect. Harrow

Labour charges 150 Rs./ labour

(2) Manure and fertilizer:

DAP- 550Rs./bag (50kg)

Urea- 280-300Rs./bag(50kg)

(3) Seed and sowing: ----------------

Seed cost and sowing cost: ----------------

(4) cost of pesticides/ insecticides/Herbicide:

Depending up on the crop: ----------------

(5) Irrigation:

By Canal - 300 Rs./hect.

By pumpset- 125Rs./hour

(6) Hoeing and weeding:

Labour charges ---------------

(7) Harvesting:

Labour charges 150Rs./day

Combined/Harvester charge- 1500Rs./hect.

(8) Threshing and Winnowing:

(B) Overhead cost:

(1) Rental value of land

(2) Interest rate of working capital

(3) Depreciation charges @ Re. 0.10/B.H.U

(4) Interest on fixed capital @ Re. 0.07/B.H.U

Sub Total-

(C) Managererial charges and Risk cost:

@ 10%on A+B

Grand Total

Gross Return-

(1) Yield of the main product

(2) Yield by products ( straw)

Net Profit per hectare

Cost of prdution per Quintal

(a) Grain

(b) By- Products

(c) Input-output ratio

Maximum limit for short term crop loan

Sl. No. Crops name (kharif) Per hect. Estimated cost(Rs.)

1. paddy 350002. Maize desi 160003. Maize hybrid 190004. Bajra 130005. Urd/moong 115006. Soyabeen 125007. Groundnut 170008. Arhar 140009. Til 700010. Pumpkin 1650011. Jowar 12000

Rabi crops

Sl. No. Name of the Crop Per hect.estimated

cost ( Rs.)1. Wheat 320002. Barley 220003. Gram/Pea 170004. Lentil 170005. Musturd 180006. Toria 145007. Linseed 140008. Sunflower 280009. Barseem 21000

Other crops:

Sl. No Name of crop Per hect. Estimated cost(Rs.)

1. Sugarcane 480002. Patato 650003. Safed musli 2000004. Satavar 720005. Ashwagandha 420006. Mentha 220007. Kalmegh 250008. Marigold 37000

Vegetable / fruits / flowers

Sl. No. Name of the Vegetable/ flower’s

Per hect. Estimated cost (Rs.)

1. Onion 255002. Onion Hybrid 365003. Raddish/Turnip/carrot 130004. Tomato/Brinjil 265005. Hybrid Tomato 520006. Papaya 180007. Rose Flower 420008. Rajnighanda 3000009. Lobia/Fabbeans 1750010. Gauava 3100011. Garlic 5000012. Palak 1100013. Sweet Potato 1200014. Corinder 1200015. Ladyfinger 1800016. Cucumber 1200017. Chilli 2000018. Pea 1700019. Mango 4600020. Couliflower/cabbage 1700021. Parwal 1850022. Pan 3200023. Arbi 1200024. Banana 5100025. Pudina 1900026. Pea/Ladyfinger/Tomato 3200027. Watermelon 1600028. Roundmelon 32000

Loan design for farming model:

Name of Farmer- Rampal S/O Maikoolal

Village- Rawanlalpur

Teh- Bilhaur

Disst- Kapurnagar

Landholding- 1.071hect.

Crops &Cropping System- Maize

Total cost involve cropwise- 15000

Total Return Cropwise - 80quintal*1300 = 104000

I suggested to Farmer subsidiary interprises - Dairy

Loan Desingn with the help of economics of dairy interprises:-

S. No. Details Level

1. Number of animals

Buffaloes

Cattle

Total

fixed Capital Involved (Rs)

6

4

10

170000

Annual increase in livestock (Rs) 15000

2- Cost (Rs)

1- Cost of fodder used

2- Press mud

3- Concentrate Mixture

4-Wheat straw /Dry Fodder

5-Medicines

6- Labor charges

7- Electricity charges

8- Miscellaneous costs

9- Interest on Fixes capital @ 10%

10- Total costs

18250

3650

2500

10000

3000

13388.20

2000

1500

17000

71288.20

3- Returns

Milk (Li)

Rate (Rs/li)

Value

Manure (trolleys)

Rate (Rs/trolley)

9125

10

91250

12

300

Value

Incremental livestock value (Rs)

Additional labor requirement (man days)

3600

15000

182.5

4- Gross returns

Net Returns

Benefit; Cost ratio

109850

38561.80

1.05

Respective cost of subsidiary enterprise- 71288.20 Rs.

Income from the subsidiary enterprises- 109850 Rs.

Net income from the crops - 89000 Rs.

Net income from the subsidiary Enterprises – 38561.80 Rs.

Total income from the crops and subsidiary Enterprises – 89000 + 38561 = 127561 Rs.

Loan Design on the basis of Total cost of cropping system and subsidiary Enterprises –

15000+71288 = 86288

Loan Design of Farming Model:

Name of the farmer - Ganganarayan s/o Soneylal

Village - Madanepur

Block & Teh - Bilhaur

Distt – Kanpurnagar

Land holding – 1.975 hect.

Crops & cropping system - Wheat

Total cost involve cropswise - 50,000 Rs.

Total Return cropwise – 176000 Rs.

I Suggested to Farmer subsidiary Enterprises - Agro-forestry enterprises

Wheat + Popular – 6 year

Loan Desingn with the help of economics of Agro- Forestry Enterprises

S. No. Details Level

1- Trees/ha

Economic life (years)

Price (rs. /sapling)

Cost of Planting

1000

5

10

6

2- Annual Cost (Rs)

FYM

Urea

4000

7500

Trunk Whitening

Irrigation

Labour

Interest on fixed capital

Total

312.5

2305.46

3875.6

1000

19593.56

3- Output (Rs)

Wood

Fuel

Total

Per year return

Labour requirement (maydays)

160000

30000

190000

38000

52.83

4- Returns (Annual)

Cost

Net

38000

19594

18406

Respective cost of subsidiary Enterprises – 132800 Rs.

Income from of the subsidiary Enrterprises - 393750

Net income form the crops – 176000 – 50,000 = 126000 Rs.

Net income from the subsidiary Enterprises – 260950 Rs.

Total income from the crops and subsidiary 126000 + 260950 = 386950 Rs.

Loan desing on the basis of total cost of cropping system and subsidiary enterprises –

50,000 + 132800 = 182800 Rs.

Estimated

Loan Deisign of Farming model:

Farmer Name - Siyaram s/o chedalal

Village - Shuklapur

Teh – Bilhaur

Dist- Kanpurnagar

Land holding – 0.731 hect.

Crop & Cropping system – Paddy ( kharif)

Totalcost involve cropwise – 30000 Rs.

Total Return cropwise – 105000 Rs.

I Suggested to Farmer medicinal & Aromatic plants – Ashwagandha :

 Annexure I

Cost of Cultivation - Ashwagandha (under transplanted conditions - one ha)

 

Sl. No. Materials Amount in Rs.

A. Materials

1 Seeds 400

2 Farm Yard Manure(FYM) 4500

3 Fertilizers ( 15 kg N + 15 kg P /ha) 760

4 Seed treatment chemicals 300

5 Plant protection chemicals 500

Sub total (A) 6460

B. Operations

1 Land preparation - Tractor ploughing, discing 2000

2 Making of ridges and furrows 2800

3 Nursery bed preparation, raising and maintenance 700

4 Transplanting 4200

5 Application of manures and fertilizers 350

6 Plant protection 350

7 Irrigation 1400

8 Interculture 1400

9 Harvesting berries and post harvest handling 8400

Sub total (B) 21600

Grand Total (A + B) 28100

Margin Money 2800

Bank Loan 25300

Respective cost of subsidiary Enterprises - 28100 Rs.

Income from subsidiary Enterprises – 46700 Rs.

Net income from the crops – 75000 Rs.

Net income from the Enterprises - 17700

Total income from the crop and subsidiary Enterprises-

75000 + 17700 = 92700 Rs.

Loan design on the basis of total cost of cropping system and subsidiary Enterprises –

30000 + 28100 = 58100 Rs.

Loan deign of farming model:Farmer name: shri dhani ram s/o nanhawa

Village : nawada mahasaran &ajauli

The.bilhaur

District: kanpur nagar

Land holding: 0.960 hect.

Crops &cropping system: nill, require horticulture crops

I suggest to farmer amla cultivation

High Density Amla

 

1. Introduction

 Aonla (Emblica officinalis) is very hardy, prolific bearer and highly remunerative even without much after care. Aonla is the richest known natural source of vitamin. Its juice contains 20 times as much vitamin C as orange juice. Aonla is known for its pharmaceutical properties.

It is a wonder herb and one of the precious gifts of nature to man. It is the best of all acid fruits and most useful for health and body rejuvenation and prevents aging. It's mineral and vitamin contents include calcium, phosphorus, iron, carotene, thiamine, riboflavin and to vitamin C. Its calorific value is 58. 100 g of fruit provides 470 to 680 mg of vitamin C. The dehydrated berry provides 2428 to 3470 mg of vitamin C per 100 g.

It is largely cultivated in Uttar Pradesh (Azamgarh, Pratapgarh, Varanasi and Barelli districts), Gujarat, Maharashtra and Karnataka. In view of its diverse uses, its cultivation is increasing fast and the crop is becoming popular with the orchardists.

2. Uses

The use of aonla in such ayurvedic preparations as Chyavanprash, Triphala and Ashokrishta is age-old. The fruits can be made into preserves, sauce, dried chips, tablets, jellies, pickles, toffee, powder etc. It is also used in pharmaceutical and cosmetic products such as hair oil, shampoos, chavanprash, etc. The ascorbic acid and other constituents are well retained even in dried form of amla fruits.

It boosts immune-system; The most important ingredient of century-old Ayurvedic medicines; fresh fruits rich in vitamin C are good live tonic, refrigerant, cooling, blood purifier and anti-

diabetic; useful in jaundice, anemia, heart complaints, dyspepsia and indigestion; seeds used to treat diabetes, asthma, bronchitis and stomach disorders.

Medical Action: Aonla is good for almost everyone on a regular basis. It reduces or eliminates the risk of environmental pollutants, normalizes cholesterol, reduces unwanted fat, cures ulcers, prevents cancer, detoxifies the body, regulates digestion, has inhibiting effects against the HIV virus, promotes metabolic function and can produce these results in a dried, natural, unprocessed form. The only thing that could possibly be better than amla for a daily herbal supplement is the Triphala formula, of which aonla constitutes one third.

3. Varieties

There has been no standardisation of varieties of aonla and they are mostly known on the basis of size, colour and also names of places. The important varieties are Banarasi, Deshi, Chakaiya, etc. of which Banarasi is the most important variety for commercial purpose. The fruits are fairly large and very good for making preserves. It is an early bearer having good keeping quality. Another important variety is Anand - 2 grown in Gujarat.

4. Climate

It is found growing in different states up to elevation of 1,500 meters from sea level. It is sub-tropical fruit but can be cultivated successfully in tropical climate as well. The plant is not very much influenced either by hot wind or frost. The mature trees can tolerate temperature as high as 460 deg.

5. Soil

The tree could be raised even on marginal lands and is capable of withstanding adverse conditions. Amla can be grown in light as well as heavy soils, however, well drained fertile soils are preferred. The plants adapt to dry regions and can also tolerate moderately alkaline soils.

6. Propagation

Shield budding is commercially followed for propagation. Proper selection of mother plant is very critical for commercial cultivation on large scale. The mother plant should be highly fruitful of known variety and the bud should be taken from the branch with good number of female flowers otherwise the plant will be unfruitful.

7. Planting

Healthy budded plants are planted during rainy season. In dry areas where mortality after transplanting is very high, the seedling root stocks can be raised in situ for budding with superior variety.

8. Spacing and Plant Population

Pits of about 0.75 cum should be dug during May-June at a distance of 7 m x 7 m accommodating 204 plants in one ha.

9. Orchard Establishment and Care

As the branches of aonla often break off carrying heavy crop load the plant should be trained to develop a low headed one. The framework should be developed by encouraging growth of 4-6 well spaced branches with fairly wide angle. The pruning of the bearing plants can be done after the harvest of the crop every year.

10. Irrigation

Aonla plants hardly require any irrigation except during the spells of dry period. The young plants require water in summer at fortnightly intervals till they are firmly established. Watering of mature bearing plants is also necessary for better fruit development and to arrest fruit drop.

11. Plant Protection

There are no major pests and diseases affecting aonla. The major ones are bark eating caterpillar among pests and aonla rust among the diseases. Spraying with neem oil and some herbal preparations is recommended.

12. Harvesting

The budded plants used in commercial cultivation start bearing from the fourth year onwards. Amla can give economic yields for around 25 years.

13. Yield

A full grown aonla plant can yield up to 200 kg fruits per year. The productivity levels could touch a high of20 MT per ha from the seventh year of planting. Average yield can be around 100 kg per tree.

14. Market

Aonla has in recent years gained prominence as a crop of economic importance because of its therapeutic properties. Aonla fruits can be processed into various products such as pickle, chutney, sauce, preserve, syrup, powder and digestive chewing nuts.

Average market price is Rs. 6 per kg.

The fruit is mainly marketed in Mumbai, Amritsar, Kolkata, Delhi, Hydrebad and Patna markets. Pratapgarh near Faizabad in UP contributes to nearly 80 per cent of the total amla production in

the country. The fruit from Tamil Nadu finds its way to the Mumbai market, apart from being marketed at Chennai, Bangalore and Kochi. At present there is a mismatch in the demand-supply chain of aonla.

15. Financial Viability

The viability of plantation is worked out based on the economic life of plant. The BCR and NPW are found to be 1.3, 10,652 respectively. The Internal Rate of . Return on 10 year basis is worked out as above 23% s_owing a high degree of financial viability.

16. Repayment Schedule

Repayment schedule is worked out on the basis of 90% of loan amount at 12% interest rate. As the income from 1st 6 years is enough to make repayments, it is suggested to provide the grace period of 6 years for principal amount. Repayment may be allowed from 7th year in graded installments, which will be repaid fully by the end of tenth year.

17. Refinance Assistance

As the scheme will be implemented on wastelands the financial institutions  will be eligible to avail 100% refinance at interest rate of 5.50% p.a.

18. Margin Money

Margin money will be decided as per borrowers' category, which may vary from 5 to 25% (i.e. from small farmers to corporate borrowers).

19. Security

Security against bank loan will be charged as per rule specified by RBI from time to time. The hypothecation of standing crop will however be the part of security.

20. Insurance Coverage

The crop may be insured against damage by natural 'calamities for which the financing bank may stipulate the special terms and conditions as per rule of General Insurance Company.

Farm Model for Aonla (Emblica officinalis)

Planting material: Budded plants Spacing: 7m X 7m

No. of plants/acre: 80

Wage rate: Rs. 50/ manday 

A. Cost of Development

Sr.

No.

Items of Expenditure

Years

I II IIIIV

Total

1 Land preparation 400 0 0 0 400

2Digging of pits of 75cu em & filling back

743 0 0 0 743

3Planting material incl. transportation cost (

1760 0 0 0 1760

 10 % extra for meeting mortality) @ Rs. 20

           

  per budling          

4 Planting & staking 350 0 0 0 350

5 Uve hedge / Fencing 1200 0 0 0 1200

6 Manures & Fertilisers &Application 1250 1500 1500 2000 6250

7 Irrigation 750 1200 1500 1500 4950

8Plant protection chemicals & application

500 500 500 750 2250

9 Orchard management 600 900 1200 1200 3900

10 Harvesting / Packing 0 0 0 400 400

11 Contingencies 755 410 470 585 2220

  Total Cost 8308 4510 5170 6435 24423

B.Yield and Income       Years    

 

    4 5 6 7 8 9 10-25

1 Yield - kg/acre 400 1200 2000 3200 4000 4800 6000

2Gross Income @ Rs. 6 per kg

2400 7200 12000 19200 24000 28800 36000

3 Net Income -4035 765 5565 12765 17565 22365 29565** Considering the economic life of aonla, a regular income of Rs. 36000 per annum will be available from 10th year onwards.

Aonla Cultivation - Financial Viability 

Aonla Repayment Schedule

Unit Cost: Rs. 24423                                                 Bank Loan(90% of TFO) : Rs. 21980(Amount in Rs.)

Year

Total Cost

Margin money @ 10%

BL Disb.

During the year

Loan O/s at

the end of

the year

Interest @ 12%

pa

Maintenance

for subsequent years

Gross Income

Repayment Net Surplus

Interest

Principal  

1 8308 831 7477 7477 897 0 0 897 0 -8972 4510 451 4059 11536 1384 0 0 1384 0 -13843 5170 517 4653 16189 1943 0 0 1943 0 -19434 6435 644 5792 21980 2638 6435 2400 2638 0 -66735       21980 2638 6435 7200 2638 0 -18736       21980 2638 6435 12000 2638 0 29277       21980 2638 6435 19200 2638 5000 51278       16980 2038 6435 24000 2038 5000 105279       11980 1438 6435 28800 1438 5000 1592710       6980 838 6435 36000 838 6980 21747

LOAN DESIGN FOR JATROFA CULTIVATION Introduction

NABARD, as an apex institution with regard to policy, planning and operation in the field of agriculture and rural credit, is actively involved in extending credit support for renewable energy development in rural areas along with other financial institutions. Development of wastelands through energy plantations, biodiesel crops / tree borne oilseeds is identified as a thrust area for which NABARD is extending 100% refinance to banks at concessional rate of interest.

Among the many species, which can yield oil as a source of energy in the form of biodiesel, Jatropha curcas has been found most suitable due to its various favourable attributes like hardy nature, short gestation period, high oil recovery and quality of oil, etc. It can be planted on degraded lands through Joint Forest Management (JFM), farmer’s field boundaries, fallow lands and as agro forestry crop.

 Description Jatropha curcas belongs to the family Euphorbiaceae and is thus closely related to other important cultivated plants like rubber, castor etc. It is believed to be a native of South America and Africa but later spread to other continents of the world by the Portuguese settlers.  The Arabs have been using this plant for medicinal purpose.  Today it is found in almost all the tropical and sub tropical regions of the world. 

There are more than 200 names for it all over the world, which indicates its significance to man, and the various possibilities of its use. In India, Jatropha curcas is found in almost all the states and is generally grown as a live fence for protection of agricultural fields from damage by livestock as it is not eaten by cattle or goat. 

BOTANICAL FEATURES

It is a small tree or shrub with smooth gray bark, which exudes a whitish colored, water, latex when cut. Normally, it grows between three and five meters in height, but can attain a height of up to eight or ten meters under favourable conditions. Leaves

It has large green to pale-green leaves, alternate to sub-opposite, three-to-five lobed with spiral phyllotaxis.

Flowers

The petiole length ranges between 6-23 mm. The inflorescence is formed in the leaf axil. Flowers are formed terminally, individually, with female flower usually slightly larger and occur in the hot seasons. In conditions where continuous growth occurs, an unbalance of pistillate or staminate flower production results in a higher number of female flowers.

Fruits

Fruits are produced in winter when the shrub is leafless, or it may produce several crops during the year if soil moisture is good and temperatures are sufficiently high. Each inflorescence yields a bunch of approximately 10 or more ovoid fruits. A three, bi-valved cocci is formed after the seeds mature.

Seeds

The seeds become mature when the capsule changes from green to yellow, after two to four months from fertilization. The blackish, thin shelled seeds are oblong and resemble small castor seeds.

Ecological Requirements

Jatropha curcas grows almost anywhere- even on gravely, sandy and saline soils. It can thrive on the poorest stony soil. It can grow even in the crevices of rocks. The leaves shed during the winter months form mulch around the base of the plant. The organic matter from shed leaves enhances earthworm activity in the soil around the root-zone of the plants, which improves the fertility of the soil.

Regarding climate, Jatropha curcas is found in the tropics and subtropics and likes heat, although it does well even in lower temperatures and can withstand a light frost. Its water requirement is extremely low and it can stand long periods of drought  by shedding most of its leaves to reduce transpiration loss. Jatropha is also suitable for preventing soil erosion and shifting of sand dunes. Cultivation practices

It can be easily propagated on massive scale by direct seeding as well as planting stem cuttings.  Hot and humid weather is preferred for good germination of seed.  Plants bear fruits in the beginning of winter.  Approximately 5-6 kgs. of seed is adequate to raise one hectare of plantation. The spacing maintained is about 2m x 2m and for high density planting 2m x 1m distance can be recommended.

Seeds or cuttings can be directly planted in the main field.  Some times the seedlings are grown in poly bags and then transplanted in the main field.  The land should be ploughed once or twice depending upon the nature of soil.  In direct planting system the seed/cuttings should be planted in the main field with onset of monsoon at a spacing indicated above.  Apart from organic manure, mixtures, fertilizers containing NPK should be applied near the planting hole.  To keep the land free from weeds in the initial stage, 3-4 hand weedings are necessary; it does not require supplementary irrigation.  However, the approximate yield of 1200 kg seed per hectare may be obtained from irrigated plantations in comparison to 750 kg seed (per hectare) from rainfed plantations.  This is expected from 3rd year onwards.  The economic life of the plant is about 35-40 years.  Jatropha oil is extracted by hydraulic press method after grinding and steaming of the seed.

Unit cost

The cost of cultivation of Jatropha curcas in one hectare at an espacement of 3m X 2m i.e., 1666 plants per ha has been worked out at Rs.25,826/- per ha. (unirrigated condition). The details of various items of expenditure are viz. land preparation, digging of pits, plant and material, manure and fertilizer, inter culture, watering and plant protection etc.  The unit cost break up of  Jatropha curcas is as follows: 

UNIT COST OF Jatropha curcas CULTIVATION IN ONE HECTARE  WASTELAND(seedling) 

ESPACEMENT:         3 M x 2 M                                             AVG. WAGE RATE:     Rs.50/MD 

NO.OF TREES/HA.:  1666                                                      CASUALTY REPLACEMENT:10 %

SURVIVAL/HA.:        1500 Nos.   YIELD  AND INCOME PER   HECTARE OF JATROPHA CULTIVATION ON WASTELANDS  

YEAR SEED PER NO.OF QNTY.OF COST TOTAL

  TREE(Kg.) TREES SEED(KG) PER KG. INCOME (RS)

3 0.50 1500 750 5 3750

4 0.50 1500 750 5 3750

5 1.00 1500 1500 5 7500

6 1.50 1500 2250 5 11250

7 2.00 1500 3000 5 15000

       8 2.50 1500 3750 5 18750

 

Economics of Jatropha cultivation in one  Hectare of wasteland

                 

Years 1 2 3 4 5 6 7 8

                 

Cost 16220 5825 3780          

                 

Benefits     3750 3750 7500 11250 15000 18750

                 

                 

Net Benefit -16220 -5825 -30 3750 7500 11250 15000 18750

                 

PWC@ 15% 20994.30              

PWB@ 15% 24970.74              

BCR 1.19              

IRR 19.41%              

Commercial uses of the Plant  The increasing gap between demand and supply of fuel wood leads to fast depletion of forest cover.  There is need to search for alternative source of energy derived from non-wood sources.  For this purpose high density plantation of Jatropha, as an energy crop, may provide energy on regular basis annually for a period of 40-45 years without replanting, unlike other fuel wood crops.  With suitable technology, jatropha could possibly be used as furnace fuel to facilitate electricity generation in a decentralized manner and at a lower cost as compared to the existing power generation system, which requires massive infrastructure for distribution of power. Besides the above, the following additional benefits can also be expected:

a) Jatropha oil is a potential substitute for diesel providing the country cheap and renewable source of energy for transport & power and can effect sizeable savings on foreign exchange.

b)Jatropha oil has a very high saponification value and is being extensively used for soap making, lubricants and candles.  The protein content in Jatropha oil cake may be used as a raw material for plastic and synthetic fibre.

c) Jatropha plant has high medicinal value.  The latex of Jatropha curcas contains an alkaloid known as Jatrophine, which is used in medicines.

d) Jatropha oil cake is rich in nitrogen, phosphorous and potassium and can be used as organic manure.

e)Revegetation of barren and denuded hills with Jatropha plants combats environmental pollution.

Thus, owing to its multiple uses, simple and cost effective technology, with or without irrigation makes it promising and profitable agro forestry crop ensuring optimum utilisation of land and manpower.  It is a crop with low capital investment, short gestation period, long productive period and unlimited employment potential in rural areas.

Yield & Economics

The plant starts giving yield from the third year onwards and the benefits increase over the years and stabilizes in the 8th year. In the financial analysis with the above parameters of the investment cost & yields, the BCR & IRR works

out to 1.19 & 19.41% respectively.

Repayment of Loan

A moratorium of four years for repayment of principal and two years for payment of interest may be allowed.

Beneficiaries Contribution / Margin Money / Down Payment

The beneficiaries may contribute towards down payment ranging from 5 to 25% depending upon their category, i.e., small and other farmers in accordance with NABARD’s norms. Beneficiary’s own labour can also be taken as his contribution towards the margin money requirement.

Quantum of Refinance

The loans extended by the banks to individual farmers and / or groups of individuals such as co-operatives under Wasteland development projects are eligible for refinance from NABARD to the extent of 100% of Bank loan.

Rate of Interest

The rate of interest on refinance from NABARD will be as per the circulars issued by NABARD from time to time.  The rate of interest to be charged to the ultimate borrowers would be decided by the financing banks. However for working out the financial viability and bankability of the model project we have assumed the rate of interest as 12%. 

farmer perception about bank:

positive

1. saving of rural people

2.agriculture loan and credit

suggestion

After study and visit the village ,contact to farmer listen to their problem about the bank loan and also assess the bank profile , loaning system ,schemes for rural

& agriculture lending

.